Japan stimulus fails to impress investors

Australian shares ended a volatile trading day flat, retreating from a fresh 20-month high hit earlier on Tuesday with the Bank of Japan's asset buying plans to stimulate the economy failing to bolster investor confidence as they had been largely factored in.

The S&P/ASX 200 index finished the day 1.6 points higher at 4779.1, after peaking at 4801.7 during trade.

"Right up until the Bank of Japan decision people were in a holding pattern," said Chris Weston, chief market strategist at IG Markets. "We traded in Australia above 4800 and then there was position squaring going into the Bank of Japan meeting given the expectations that were built in."

The Bank of Japan doubled its inflation target to 2 per cent and eased monetary policy further, a widely expected move in response to relentless political pressure for bolder action to pull the country out of deflation.

Mr Weston said investors were taking profits off the table. "The volatility now is just surrounded by what we've seen," he said.

Global miners BHP Billiton and Rio Tinto were up 0.1 per cent and 0.7 per cent respectively.

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Gold miners finished the day weaker as the metal remained flat. Newcrest Mining slipped 0.2 per cent. Perseus Mining lost 5.9 per cent on the back of a disappointing production report which showed gold production was 13 per cent below revised production guidance range for the quarter.

Banks were mixed. National Australia Bank dropped 1 per cent on a report that Spanish bank Santander denied speculation it is interested in buying NAB's troubled British banks. ANZ slipped 0.1 per cent, while CBA rose 0.6 per cent and Westpac finished flat.